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HomeMy WebLinkAboutItem 8.1 BusinessLicTxLndfilOprCITY OF DUBLIN � ciiy1wy CITY COUNCIL MEETING DATE: October 10, 1994 SUBJECT: Proposal By Alameda County To Revise Business License Tax Paid By Landfill Operators NA-I(Prepared By: Paul S. Rankin, Assistant City Manager) EXHIBITS ATTACHED: 1. /Letter From County Administrator To Board Of Supervisors dated September 29, 1994. RECOMMENDATION: Consider whether the City Council desires to take a position on the proposal. Direct Staff to communicate the City Council position, prior to the Board of Supervisor's Public Hearing scheduled for October 18, 1994. FINANCIAL STATEMENT: If the County enacts the tax increase the City will need to make necessary adjustments in the garbage rates charged to assure that the garbage company recovers their costs. The impact will vary based upon the type and frequency of garbage service. DESCRIPTION: In recent years Alameda County has experienced significant revenue shifts, as a direct result of State legislation intended to balance the State Budget. Other levels of local government have also been impacted, however, counties have received a greater proportion of the recent revenue reductions made by the State legislature. Alameda County is currently considering various proposals to balance the County Budget. In January 1991, the County enacted a Business License Tax Ordinance, which affected all business operating within the unincorporated County jurisdiction. As enacted the ordinance had very little direct impact on the City of Dublin. Although the landfill used by our garbage company was subject to this tax, the total annual revenue collected by the County was $12,423. This was the total amount paid by all Waste Facility Operators in Alameda County, and was based upon a rate of 10 cents per $1,000 of gross receipts. The County reports that in 1993 over 1 -.9 million tons of garbage were handled by landfills in unincorporated Alameda County. Obviously the spreading of the $12,423 in Business License Tax revenue over all disposal costs had very little impact on any single jurisdiction. The County is proposing to amend its method for calculating the Business License Tax for the Waste Disposal Facility Operator category. The proposed amendment would charge operators 95 cents per ton of solid waste accepted at the facility. County Staff estimate that this will generate annual revenues for the County of $ 1.9 million. ' Following the public hearing process the County anticipates implementing the change effective January 1, 1995. The County has modeled its proposal after an identical action taken by the City of San Leandro, to levy a 95 cent per ton tax on the operator of the Davis Street Transfer Station. The City of Dublin was not affected by the San Leandro tax since Dublin's waste is hauled directly to the Altamont Landfill. County Staff have calculated potential rate impacts on Residential and Commercial customers. Based upon data used in the January 1994 Garbage Rate Adjustment Report, City of Dublin rate payers would incur approximately $25,800 per year in additional taxes. Since the Garbage Company is allowed under its agreement to collect all operating costs, it COPIES TO: Dan Borges, LDD General Manager 46-*1 ITEM No . CIY CLERK FILE is assumed that the Company will request that the City Council raise garbage collection rates to cover this additional tax. Preliminary City Staff analysis project the following local rate effects of the increased County Business License Tax: Residential: It is estimated to increase the cost of collection and disposal by $ 0.07 (seven cents) per can per month. In 1993, 54.2% of the customers subscribed to single can service. Approximately, 42% had two can service and would pay an additional 14 cents per month. Commercial: It is estimated to increase the current monthly cubic yard rate by $ 0.26. In 1993, 62% of the commercial bins serviced were 4 cubic yards or greater. In addition, many of these accounts are serviced more than once per week, which will further increase the impact on the commercial base. Drop Box: It is estimated to increase the per yard rate by $0.29. The rate for the smallest regular Drop Box (excluding the handy hauler ) is 14 cubic yards. It must be noted that these are preliminary estimates and would be subject to change based upon updated disposal data. As noted in the County Staff report, residents and businesses in Fremont, Newark and Union City would not be subject to this tax, since their waste is taken to the Durham Road Landfill located in the City of Fremont. The County has not specified that the new revenue will be utilized for any specific purpose or waste related program. It is also important to note that the Landfill operations are already subject to various regulatory fees, which inflate the cost of disposal paid by local residents and businesses. The following chart shows taxes and fees currently levied at the landfill by regulatory agencies on a per ton basis: LANDFILL FEES PER TON State of California Eastin Tax For Landfill Closures $ 0.600 State of California AB 939 Fee 0.750 Local Enforcement Agency Inspection Fee 0.094 Alameda County Waste Mgt Authority - Mgt Fee 1.500 Alameda County Hazardous Waste Program Fee 1.250 Alameda County Measure D Recycling Fee 6.000 Subtotal Current Landfill Fees $10.194 The County proposal will increase the per ton regulatory fees by 9.3 percent. The County Business License Tax will also represent a significant deviation from other fees collected on a per ton basis. The County Business License Tax will not be directly related to any waste related program of function. Staff recommends that the City Council review the County proposal in light of the budgetary problems encountered by counties throughout the State. If the City Council wishes to take a position on the matter, Staff will prepare the appropriate document for the Mayor's signature. ,ta • r STEVEN C. SZALAY COUNTY ADMINISTRATOR AGENDA October 4, 1994 C O U N T Y A D M I N I S T R A T O R ,_ ! 1, 1994 September 29, 1994 r �? ►�, .. , SUSAN S. MURANISHI ASSISTANT COUNTY ADMINISTRATOR Honorable Board of Supervisors Administration Building Oakland, California 94612 Dear Board Members: Subject: PROPOSED AMENDMENT TO BUSINESS LICENSE TAX ORDINANCE FOR WASTE DISPOSAL FACILITY OPERATORS DOING BUSINESS IN THE UNINCORPORATED AREAS Recommendation: It is recommended that your Board hear public continent and conclude the public meeting to consider a proposed amendment to the Business License Tax Ordinance for waste disposal facility operators doing business in the unincorporated areas that would change the Business License Tax from 10 cents for each $1,000 of gross receipts to 95 cents per ton for solid waste accepted at waste disposal facilities located in the unincorporated areas of the County. Your Board has scheduled a public hearing on Tuesday, October 18, 1994, at 9:30 A.M. to consider approving the first reading of the proposed amendment to the Business License Tax Ordinance. Discussion /Summary: In January 1991, your Board approved a Business License Tax Ordinance for the unincorporated areas of the County to provide funding for unincorporated areas services and help mitigate 1991 -92 State Budget cuts. A component of the Ordinance includes charging a tax at a rate of 10 cents for -each $1,000 of gross receipts to public utility providers conducting business in the unincorporated areas including those providing sanitary and garbage, electrical, gas, cable television, and Public Utility Commission (PUC) related telephone services. An exemption is provided for any public utility which pays a franchise tax to the County based on gross receipts. The exemption applies only to the business conducted under the franchise agreement. Increasing the Business License Tax for Waste Facility Operators doing business in the unincorporated areas has been approved as part of the Tier II Budget Balancing Strategy to help mitigate the impact of the 1994 -95 Final State Budget on Alameda County. Among other cuts, the State has shifted approximately $140 million in County property taxes to schools over the past three years. Specifically, this component of the strategy includes 1221 OAK STREET • SUITE 555 • OAKLAND. CALIFORNIA 94612 • (51 O) 272.6984 FAX (510) 272 -3784 • • Honorable Board Members - 2 - September 29, 1994 changing the Business License Tax charged to Waste Disposal Facility Operators doing business in the unincorporated areas from 10 cents per $1,000 of gross receipts to 95 cents per ton of solid waste accepted at waste disposal facilities located in the unincorporated areas. For comparison, in January 1993, the City of San' Leandro imposed an increased charge of 95 cents per ton under its Business License Tax Ordinance while the City of San Jose imposed a $13 per ton increase effective July 1992. Annual Business License Tax revenues from Waste Disposal Facility Operators are currently estimated at $12,423 per year at the current rate. Based on the attached preliminary estimates, changing the tax to 95 cents per ton would generate additional estimated annual, revenues of $1.9 million assuming the annual receipt of approximately two million tons of solid waste by Waste Facility Operators doing business in the unincorporated areas. For 1994 -95, estimated actual and accrued revenues total approximately $1.5 million for nine months assuming implementation of the tax change on January 1, 1995. It is difficult to estimate how the proposed increase in the Business License Tax will affect residential and commercial customers receiving solid waste disposal services. This is because it is not possible to predict how these costs will be apportioned between residential and commercial customers and because there are varying levels and types of residential and commercial use. Two possible examples of the potential impact include the additional monthly cost for weekly disposal of solid waste for one or two 32 gallon cans for residential customers and the additional monthly cost for disposal of one to two cubic yards of solid waste for commercial users. The following chart shows these additional costs assuming roughly one - half of solid waste received by Waste Facility Operators in the unincorporated areas is generated by residential users and one -half is generated by commercial users. Monthly cost for one 32 gal. can service . 6.1 cents per month Monthly cost for one cubic yard 38.4 cents per month Monthly cost for two 32 gal. can service 12.3 cents per month Monthly cost for two cubic yards 76.8 cents per month Attachments A, B & C provide backup information for these examples. As shown in Attachment C, the increase for residential customers may result in less than a 1% increase in waste disposal costs. For commercial users, the increase may range from less than 1% to 4.7 %. Honorable Board Members - 3 - September 29, 1994 The customer base for Waste Facility Operators in the unincorporated areas include Alameda County's unincorporated areas, the City and County of San Francisco and Alameda County cities excluding Fremont, Newark and Union City. This includes over 700,000 households and approximately 60,000 businesses. SB 376, Statutes of 1993, changed the Government Code to increase public notice and public meeting requirements for new or increased general taxes. Pursuant to the Government Code, on August 30, 1994, your Board scheduled a public meeting for October 4, 1994 and a public hearing for October 18, 1994 to consider approving the first reading of the proposed amendment to the Business License Tax Ordinance for Waste Disposal Facility Operators doing business in the unincorporated areas. Appropriate notice has also been provided pursuant to the Government Code. Financing: For 1994 -95, estimated additional revenues from changing the Business License Tax for solid waste disposal facility operators are $1.5 million assuming implementation of the tax change on January 1, 1995. These revenues will be used to help mitigate Final State Budget cuts and re- balance the 1994 -95 Budget. Annual revenues from imposing the tax are estimated at $1.9 million. Very truly yours, -TEVEN C. SZALAY COUNTY ADMINISTRATOR SCSXG Attachments pnjpbus4.kg c: Auditor - Controller County Counsel Treasurer -Tax Collector Lynn Suter, Legislative Advocate City Managers City & County of San Francisco Joint Refuse Rate Review Committee Waste Management Authority Waste Management of Alameda County BFI, Corporation Budget Technical Workgroup Budget Advisory Workgroup 17- Aug -94 Potential Annual Disposal Site Revenues from Revising Business License Tax Estimated Rate Assuming 1/2 Tonnage is Residential Sibe\Source Altarnont Contra Costa County" San Francisco Alameda County Subtotal Vasco Road Alameda County Total All . 'per solid waste management authority — conditional use permit filed Waste disposal limited to 1,950 tons per day or 507,000 tons max annually. Attachment A Number of Assume Cans 32gal. monthly cost monthly cost 1993 Gross 1/2 Tonnage @30 bs. Mnual Revenue cost per for one can for two can Tonnage' is Residential per Can @$.95 per Ton 32 gal. can service service WA WA WA 628,193 314,097 20,939,767 909,725 454,863 30,324,167 a 1,537,918 768,959 51,263,933 $730,511 $0.014 $0.061 $0.123 428,925 214,463 14,297,500 $203,739 $0.014 $0.061 $0.123 I , 843 983,422 65,561,433 4, 14 $0,061 $0.123 0 17- Aug -94 Potential Annual Disposal Site Revenues from Revising Business License Tax Estimated Rate Assuming 1/2 Tonnage is Commercial Sita\Source Altamont Contra Costa County" San Francisco Alameda County Subtotal Alameda County Total All 'per solid waste management authority — conditional use permit filed Waste disposal limited to 1,950 tons per day or 507,000 tons max annually. Number of Assume Cubic yards 1993 Gross 12 Tonnage @200 gal per cubic yard Tonnage' is Commercial or 188 lbs. per cubic yard Annual Revenue cost per @$.95 per Ton cubic yard Attachment B monthly cost monthly cost for one for two cubic yard cubic yard WA WA WA 628,193 314,097 3,341,452 909,72:i 454,863 4,838,963 • 1,537,918 768,959 8,180,415 $730,51.1 $0.089 $0.384 $0.768 428,925 214,463 2,281,516 $203,739 $0.089 $0.384 $0.768 1,9ffi,843 983,422 10,461,931' 4 0 29- Sep -94 Change She/Source 3.11% Refuse Pickup Practices/Rates 3.140% Aftamont 1.690/0 Vasco Rd./Berkeley transfer (Based on telephone survey of cities & 1.51% Aftamont/Directhaul • 3.74% Aftamont waste disposal facility operators) Durham Road, Fremont Business License Tax 4.71% Aftamont Business License Tax 1.15% Vasco Rd./Direct haul rate Durham Road, Fremont. rate Aftamont Incorp./Unincorp. Mandatory Monthly Residential (@$.95 per Ton) Monthly Commercial ( (@$.95 per Ton) station Residential Rate for Monthly Cost Percent Rate for Monthly Cost Pick -up one 32 Gal. Can" per 32 gallon can Change one Cubic Yard per cubic yard 1 Alameda Yes $11.40 $0.061 0.54% $12.33 $0.384 2 Albany Yes $13.32 $0.061 0.46% $12.23 $0.384 3 Berkeley Yes $12.10 $0.061 0.51% $22.70 $0.384 4 Dublin Yes $8.69 $0.061 0.70% $25.40 $0.384 5 Emeryville Yes $7.50 $0.061 0.82% $10.28 $0.384 6 Fremont No $16.99 WA $42.05 WA 7 Hayward Yes $8.50 $0.061 0.720/6 $8.15 $0.384 8 Livermore No $10.93 $0.061 0.56% $33.45 $0.384 9 Newark No $12.20 WA $48.07 WA 10 Oakland Yes $14.34 $0.061 0.43% $12.76 $0.384 11 Piedmont Yes $14.18 $0.061 0.430% $14.00 $0.384 12 Pleasanton Yes' $18.93 $0.061 0.320/6 $71.59 $0.384 13 San Leandro Yes $1040 $0.061 0.59°/4 $10.13 $0.384 14 Union City Yes $11.52 WA $43.94 WA Unincorporated Areas Yes Castro Valley $9.95 $0.061 0.629% $10.13 $0.384 San Lorenzo,Ashland, Cherryland $9.50 $0.061 0.651/6 $10.13 $0.384 San Francisco Yes $9.44 $0.061 0.650% $65.12 $0.384 "Use 90 gal. can only. $5 permit allows direct haul. 32 gal.can contains average of 30lbs. of solid waste. ATTACHMENT G Percent Change She/Source 3.11% Aftamont 3.140% Aftamont 1.690/0 Vasco Rd./Berkeley transfer station 1.51% Aftamont/Directhaul • 3.74% Aftamont Durham Road, Fremont 4.71% Aftamont 1.15% Vasco Rd./Direct haul Durham Road, Fremont. 3.01% Aftamont 2.740/a Aftamont 0.541% Vasco Rd. /Pleasanton transfer station 3.790/6 Aftamont Durham Road, Fremont 3.790% Aftamont 3.791Y. Aftamont 0.590% Aftamont